Statistically speaking, long term investing is a profitable endeavour. But unfortunately, some companies simply don’t succeed. To wit, the Nurminen Logistics Oyj (HEL:NLG1V) share price managed to fall 80% over five long years. That is extremely sub-optimal, to say the least. On the other hand the share price has bounced 8.1% over the last week.
While a drop like that is definitely a body blow, money isn’t as important as health and happiness.
See our latest analysis for Nurminen Logistics Oyj
Given that Nurminen Logistics Oyj didn’t make a profit in the last twelve months, we’ll focus on revenue growth to form a quick view of its business development. When a company doesn’t make profits, we’d generally expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
Over five years, Nurminen Logistics Oyj grew its revenue at 11% per year. That’s a pretty good rate for a long time period. So the stock price fall of 28% per year seems pretty steep. The market can be a harsh master when your company is losing money and revenue growth disappoints.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
HLSE:NLG1V Income Statement, February 24th 2020
Take a more thorough look at Nurminen Logistics Oyj’s financial health with this free report on its balance sheet.
What about the Total Shareholder Return (TSR)?
Investors should note that there’s a difference between Nurminen Logistics Oyj’s total shareholder return (TSR) and its share price change, which we’ve covered above. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Dividends have been really beneficial for Nurminen Logistics Oyj shareholders, and that cash payout explains why its total shareholder loss of 65%, over the last 5 years, isn’t as bad as the share price return.
A Different Perspective
While the broader market gained around 15% in the last year, Nurminen Logistics Oyj shareholders lost 7.3%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, longer term shareholders are suffering worse, given the loss of 19% doled out over the last five years. We would want clear information suggesting the company will grow, before taking the view that the share price will stabilize. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Case in point: We’ve spotted 4 warning signs for Nurminen Logistics Oyj you should be aware of.
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on FI exchanges.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.